TIDMMML
RNS Number : 1638N
Medusa Mining Limited
29 August 2011
Medusa Mining Limited
Publication of Annual Report and Financial Statements
29 August 2011
Medusa Mining Limited ("Medusa" or the "Company") advises that
its annual report and financial statements for the year ended 30
June 2011 has been published. The document can be accessed through
the link at the end of this announcement and the Company's website
(www.medusamining.com.au).
A copy of this report has been filed with the National Storage
Mechanism and will be available for inspection shortly at
www.hemscott.com/nsm.do.
HIGHLIGHTS OF THE FINANCIAL YEAR
Financials
- Earnings before interest, tax, depreciation and amortisation
("EBITDA") of US$120.7M, up US$47.0M or 64%
- Earnings per share ("EPS") of US$0.587 on a weighted average
basis, based on net profit after tax ("NPAT") of US$110.4M (2010:
EPS of US$0.378 based on NPAT of US$65.8M)
- Revenues increased 58% to a record US$149.6 million, due to
increased gold production and a higher price received on sale of
gold. Medusa is an un-hedged gold producer and received an average
gold price of US$1,371 per ounce from the sale of 96,217 ounces of
gold for the year.
- The Company paid un-franked dividends totalling A$0.10 per
share in two equal instalments during the year.
Item 30 Jun 2011 30 Jun 2010 Variance
Revenues US$149.6M US$94.6M 58%
EBITDA US$120.7M US$73.7M 64%
NPAT US$110.4M US$65.8M 68%
EPS (basic) US$0.587 US$0.378 55%
Cash & bullion US$102.1M US$55.8M 83%
Dividend A$0.10 - -
paid
The Company remains debt free and had total cash and cash
equivalent in gold on metal account of US$102.1M at year end (2010:
US$55.8M).
Figure 1 (please see the link at the end of this announcement)
shows the revenue from 2007 to 2011
Operations
30 June 30 June
Description Unit 2011 2010
Tonnes mined WMT 262,610 198,693
Ore milled DMT 266,613 179,609
Recovered grade gpt 12.63 16.52
Recovery % 94% 94%
Gold produced ounces 101,474 89,679
Cash costs
(1) US$/oz $189 $184
(1) Net of development costs and includes royalties and local
business taxes but no by-product credits
- The Company produced a record 101,474 ounces of gold for the
year, an increase of 11,795 ounces or 13% from the previous year's
production of 89,679 ounces, at an average recovered grade of 12.63
g/t gold (2010: 16.52 g/t gold);
- The average cash cost for the year of US$189 per ounce, was
marginally higher than the previous year's average cash costs of
US$184 per ounce.
- The production guidance for the forthcoming fiscal year is
between 100,000 to 110,000 ounces at cash costs of around US$200
per ounce. There is currently a heavy emphasis on mine development
to prepare the Co-O Mine for future production increase.
Figure 2 (please see link at the end of this announcement) shows
production from 2008 to 2011 and also budgeted production for
2012
Reserves and Resources
Co-O Reserves Jun 2011 Jun 2010 Variance
Probable reserves 502,000 505,000 (3,000)
Co-O Resources Jun 2011 Jun 2010 Variance
Indicated resources 616,000 603,000 15,000
Inferred resources 1,344,000 898,000 446,000
Bananghilig
Resources Jun 2011 Jun 2010 Variance
Inferred resources 650,000 650,000 -
- Gold reserves at Co-O maintained at the 500,000 ounces
level
- Co-O's gold resource at year end comprised of 616,000
indicated resource ounces and 1,344,000 inferred resource ounces,
representing increases of 15,000 ounces and 446,000 ounces within
the indicated and inferred categories respectively
Figure 3 (please see link at the end of this announcement) shows
resource from June 2007 to June 2011
Exploration
- Contiguous tenement package maintained at >800km2;
- Budgeted exploration for 2012 fiscal year of US$27.0 million
(2011 actual: US$26.7 million);
- Exploration highlights at Co-O include:
- discovery of new veins and extensions to known veins to the
north and east;
- extension along strike to approximately 1,600 metres;
- extension across strike to approximately 750 metres;
- demonstrating that mineralisation extends to at least 750
metres below the mine's adit entrance; and
- estimation of a Conceptual Exploration Target ** for the Co-O
Mine of between 3 and 7 million ounces of gold.
** The potential target size and grade of the Co-O Mine is
conceptual in nature and there has been insufficient exploration to
define a mineral resource. It is also uncertain if further
exploration will result in the target being defined as a mineral
resource.
- At the Bananghilig disseminated gold deposit, drilling
commenced in July 2010 to validate and extend resources and
establish reserves as a basis for a feasibility study;
- At Saugon, re-drilling of the First Hit Vein has produced
encouraging results; and
- A large geophysical Induced Polarisation and ground magnetics
programme is ongoing over the Tambis intrusive-breccia complex,
Kamarangan, Usa, Saugon and Lingig.
Figure 4 (please see the link at the end of this announcement)
shows exploration from 2008 to 2011 and also budgeted exploration
for 2012.
New Co-O Mill
The Board on 17 November 2010 approved the construction of a new
Co-O mill with capacity to produce 200,000 ounces per year.
Subsequently, after evaluation of three sites, the preferred
option is the complete remodelling of the current mill site. The
initial Capex was estimated at US$80 million, inclusive of mine
development and the Saga Shaft, which has now been reduced to
approximately US$70 million.
Permitting requires the upgrading of the current Environmental
Clearance Certificate which is anticipated to be completed by late
September 2011.
The SAG mill has been ordered and the winder for the Saga Shaft
has been secured.
Replacement and transferral of buildings and facilities in and
around the current mill commenced in July 2011 to make room for the
expansion.
The preliminary construction schedule after regulatory
permitting is estimated to be 21 months.
Preliminary Development Timetable
Figure 5 (please see link at the end of this announcement) sets
out the preliminary development timetable.
Dividends
The Board has approved a final un-franked dividend payment of
A$0.05 per share payable to shareholders on 30 September 2011.
The relevant dates for the interim dividend are as follows:
Dividend Record Date 16 September 2011
Ex-Dividend Date 12 September 2011
(ASX purposes)
Ex-Dividend Date 14 September 2011
(LSE purposes)
Dividend Payment 30 September 2011
Date
There is no foreign conduit income attributed to the
dividend.
The Managing Director, Peter Hepburn-Brown, commented:
"It is both a privilege and a challenge to be invited to become
Medusa's Managing Director as it enters the next growth phase in
its quest to become a 400,000 ounce producer by 2015. We are
confident we have the mineralisation to support these aspirations
within achievable time frames.
This last financial year has been the first full year of
production at the rate of 100,000 ounces from the Co-O Mine and we
have forecasted production of between 100,000 to 110,000 ounces for
the current financial year. Over the next few quarters there will
be heavy emphasis on development at the Co-O Mine to prepare for
the future production increase, similar in principle to a pre-strip
at an open pit mine. We are developing new levels, sinking new and
deeper shafts, and planning infrastructure that will support mining
to a depth of approximately one kilometre with drilling to date
pointing to good grades up to 750 metres below surface. Exploration
at the mine effectively discovered in excess of 560,000 ounces
during the year which includes the replacement of approximately
101,000 ounces mined during the year. This is in line with the
stated Company policy of replenishing, at a minimum, whatever
ounces which have been mined on an annual basis. The total
resources at the Co-O Mine as at 30 June 2011, now stands at
1,960,000 ounces, an increase of 30% from the previous figure of
1,501,000 ounces at 21 June 2010.
The Co-O Mine has produced to date around 450,000 ounces and has
a current resource of 1,960,000 ounces. Drilling during the year
and the new resource estimate have strongly reinforced the
Conceptual Exploration Target size of 3,000,000 to 7,000,000
ounces. Currently the quantified amount of gold in the deposit of
2,410,000 ounces is approaching the lower limit of this range,
indicating the Co-O Deposit is potentially a world class deposit in
terms of size and thus promising to be a long life mine.
Medusa has continued its aggressive exploration programme having
spent just under US$27 million to 30 June 2011 (US$19 million to 30
June 2009) which achieved 131,500 metres of core drilling and we
have budgeted US$27 million in the current financial year. Six
surface rigs and five underground rigs will continue drilling at
the Co-O Mine with seven surface rigs at the Bananghilig Deposit
and up to 3 rigs at the Anoling, Saugon and other projects during
the year.
Copper exploration was limited during the year except for
Induced Polarisation and ground magnetics surveys which commenced
in May 2011 (and are on-going) over the Tambis intrusive-breccia
complex, Kamarangan, Saugon, Usa and Lingig. Subject to encouraging
results, we expect to initiate drilling on prioritised copper
targets in the current financial year.
Financially the Company is in a sound position with
approximately US$102 million in cash and cash equivalent in bullion
as at 30 June 2011. The Company has continued to produce gold at
cash costs of just under US$200 per ounce in an economic climate
where the gold price has continued to climb.
The margins generated from gold sales, as evidenced by the
record profit in excess of US$110 million (US$65.8 million in
2010), enables Medusa to self-fund the Co-O Mill expansion to
200,000 ounce capacity, continue its extensive exploration
programme and pay a dividend twice a year. The Capex for the Co-O
Mill expansion is estimated at US$70 million inclusive of
concurrent mine development and shaft sinking.
The Company's involvement in a diverse range of community
activities continued during the year, including establishing
partnerships with government bodies and attracting corporate
sponsors for some of its activities. Education continued to be a
major focus, but with its rice growing programmes, establishment of
long term income rubber tree reforestation plantations and many
other projects, we are proud of our contribution to others within
our operating environment.
The Company has increased the availability of training
programmes for employees and reinforced its focus on health and
safety issues. It continuously reviews and updates work practices
and procedures and is using external consultants to assist in this
process.
In closing, I would like to welcome Mr Jun Angeles who joined
our Board in July this year, and to thank my fellow Directors and
our Perth office staff. Particular appreciation is due to our over
2,600 strong Filipino team under the guidance of Mr Sam Afdal, our
managers and all employees and contractors. It has been a great
team effort as we again achieved record results for the year. We
also very much appreciate the continued support of the local
communities and the relevant government agencies which enable us to
expand our activities and thereby provide benefits to an increasing
number of people."
http://www.rns-pdf.londonstockexchange.com/rns/1638N_-2011-8-29.pdf
Contacts:
Australia
Medusa Mining Limited
Peter Hepburn-Brown
Managing Director
+61 8 9367 0601
Medusa Mining Limited
Geoff Davis
Chairman
+61 8 9367 0601
admin@medusamining.com.au
http://www.medusamining.com.au
United Kingdom
Fairfax I.S. PLC
Financial Adviser and Broker
Ewan Leggat/Laura Littley
+44 (0)20 7598 5368
This information is provided by RNS
The company news service from the London Stock Exchange
END
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